“What Elon Musk and Steve Jobs really have in common,
is a rare form of design thinking powered by unfettered conviction.”
If you can put a positive spin on the passing of a national icon, as most of us have, you could say this has been a great week for South Africa. The nation turned the death of its favourite son, Nelson Mandela, into a celebration of a life the world is unlikely to witness again.
You’ve often heard us repeat Prof. Nick Binedell’s revelation that this country has produced more world class companies than any other of its size; the nomination by Fortune magazine of Elon Musk as International Businessperson of the Year, is another feather in the already heavily-decorated cap of one of the world’s great business “nurseries”.
Before we get lost in the euphoria of Musk’s achievement (there are more than a few who believe he’s in the league of Steve Jobs, no less), for racing fans, we can clap hands at Phumelela’s response to Gold Circle’s recent prize money hikes, with the announcement of increases of between 5% and 17% across their four racing jurisdictions in Gauteng, North West and the Eastern and Western Capes. Underpinned by minimum purses of a million and R750,000 for their Group Ones for older horses and juveniles respectively, this is a welcome fillip for an industry which has shown encouraging signs of a comeback across the globe.
Back to Elon Musk. Americans have long cherished their monopoly on their status as the planet’s foremost provider of business geniuses. They will argue, of course, that Musk is one of their “own”, and there is justification for this view in the fact that whatever the man has done, he’s done in the U.S. of A. But his DNA is South African, his upbringing is South African, and his schooling is South African. He was born in Pretoria on 28th June 1971, raised here and shares his high school alma mater, Pretoria Boys’ High School, with John Smit, Oscar Pistorius and Michael Azzie.
Last week, Standard Bank’s Paul Hansen summarised Fortune’s essay on Musk, which given his god-like standing as the idol of their business community, almost “outrageously” compares our man with Steve Jobs. In a nutshell:
- The co-founder of PayPal, Elon Musk, has disrupted aeronautics with Space Exploration Technologies, (SpaceX), shaken up the auto business with Tesla Motors; and retooled the energy sector with SolarCity.
- After a rocky start 10 years ago, Tesla has emerged as the world’s most prominent maker of all-electric cars.
- Sales are up more than 12 times for the first 9 months of the year! The company is on track to top $2 billion in sales in 2013 (R23billion)
- The share is up more than 4 times year-to-date, even after a hefty correction.
- Bloomberg Wealth estimates Musk’s wealth at $7.7bn (about R80bn), but “it is his audacity and tenacity that make him Fortune’s Businessperson of the Year”.
Fortune on its Businessperson of the year:
- “What Elon Musk and Steve Jobs really have in common, is a rare form of design thinking powered by unfettered conviction.”
- “When future historians report human progress during the 21st century, they may conclude that one of the key moments took place a year ago in Elon Musk’s bedroom. His eureka! moments happen every few months. Sometimes during his morning shower, sometimes late at night before sleep, sometimes, as on this occasion, waking at 2a.m. As he describes it: “I realised that a methane-oxygen rocket engine could achieve a specific impulse greater than 380”. The bottom line is that a manned spacecraft could possibly be sent to Mars without having to carry rocket fuel with it. Musk genuinely believes that within the next couple of decades, humans will be colonizing Mars. This is not your typical CEO!
- You’d say Elon Musk was crazy, except that he has an unnerving track record of turning his dreams into reality. His second successful Internet start-up, PayPal, which was sold to eBay in 2002 for $1.5 billion only three years after its founding (WOW, and after the TMT bubble burst too) was just the warm-up. (Compaq bought his first web software company). His next act, SpaceX, became the first private company to deliver cargo to the Space Station and has picked up billions of dollars of orders from NASA and others.
- His electric-vehicle company, Tesla Motors, is proving that cars CAN be both green and sexy. (Oh, and earlier this year, while running those two companies, he found time to unveil a radical new intercity mass-transport concept called Hyperloop).
- The only reasonable recent comparison with Musk in the business world is Steve Jobs. They are in a category of their own, says Fortune: serial disrupters.
- Jobs created the world’s most valuable company, and along the way transformed at least four industries (computers, music, animated movies, mobile communications).
- Musk may achieve even greater impact. SpaceX has already slashed the cost of rocket launches, outperforming the world’s national space programs.
- Meanwhile Tesla is on track to become the first successful new automobile manufacturer in the US in 50 years, and in the process galvanized global adoption of electric-powered transport. He’s pumped money and ideas into SolarCity, which is now America’s leading provider of domestic solar energy.
- It is no surprise then that Musk has often been referred to of late as the “next Steve Jobs”.
- Venture capitalist Steve Jurvetson has been making the comparison between Musk and Jobs for years. He was an employee of Jobs at NeXT and got close-up exposure to Jobs’ thinking during their one-on-one walk meetings. Jurvetson also became an early investor and board member of both SpaceX and Tesla, and has had plenty of opportunity to see Musk’s mind in action.
- Both men have a similar approach: there’s a relentless drive to divide the challenge into simpler pieces, then reshuffle those pieces until the perfect mix is achieved.
- Take the creation of Tesla’s Model S as an example. Battery technology was simply too expensive and too heavy for it to be viable. The key breakthrough was to switch to the lithium-ion battery technology used in computers and phones. Although it was expensive, it had a much higher energy density than other battery technologies and benefitted from mass use in consumer electronics with significant performance/cost improvements.
- If you could combine large enough numbers of lithium-ion cells into a single battery, you could provide not only adequate range for a car, but also power capable of turning the humble electric car into an object of desire. Bingo! Both of the major roadblocks eliminated in a single technology move.
- Seven years ago, Musk posted an article titled “The Secret Tesla Motors Master Plan”, which outlines the basics: three generations of cars, first the super-high-end sports car, then a sporty four-door family car, then a mass-market car. And underpinning it all, the conviction that the cars wouldn’t just work, but they’d be lusted for.
- At the time, many in the auto industry chuckled at his naiveté. They’re not laughing now.
- Musk earned business and physics degrees from the University of Pennsylvania, and in 1995 nearly started a Stanford University Ph.D program in materials science and applied physics. He left to start a business before ever taking classes. Jobs spent only one semester at Reed College before he dropped out in 1973.
- Musk launched Internet software company Zip2 in 1995 and sold it to Compaq for $300 million. Jobs started Apple with Steve Wozniak from his parents’ garage.
- Musk prefers form-fitting T-shirts. And jeans. Jobs wore black mock turtlenecks. And jeans.
- Musk was fired as CEO of X.com (later PayPal) while on vacation in 2000. (He was replaced by co-founder and former friend, Peter Thiel). Musk later joked “That’s the problem with vacations”. Jobs was pushed out of Apple in 1985, after clashing with then-CEO John Sculley.
- Musk ousted Tesla co-founder and then-CEO Martin Eberhard in 2007. The next year he installed himself as CEO and started working on a turnaround. Jobs returned to a troubled Apple in 1996, which bought his company, NeXT, and then pushed out then-CEO Gil Amelio. He became interim CEO in 1997, and permanent CEO in 2000.
- Musk is the chairman and a major backer of SolarCity.
- Jobs acquired Pixar in 1986 and as CEO (while running NeXT, and later Apple), he released the first CGI animated feature film, Toy Story. (He sold Pixar to Disney in 2006 for $7.5bn).
- Jobs credited part of his success to the calligraphy class he took at Reed College. Jobs was obsessed with design elegance.
- As a kid, Musk spent more time with books than with friends. He inhaled science, history, and comic books. He took degrees in both physics and business, an unusual combo. And he too is obsessed with design perfection.
- Musk’s decisions are informed by an intricate combination of what is technically possible, what is economically intelligent and what is experientially satisfying.
- But wait, notes Fortune, there must be something else. It is conviction.
- Conviction comes about when the possible future you see, aligns with a deeply held view of how the world should be.
- “The clarity of vision displayed by Jobs was off the charts. Ditto Musk’s passion today”.
- The products they both imagined were sometimes seen by others, but regarded as simply too daunting.
- The laser-beam clarity of vision and the determination to persist despite failed launches, are a defining characteristic of both.
- Note: the Tesla Motors manufacturing facility in Fremont, California is large enough to build 500,000 cars annually, 20 times its current output (reminds one a bit of Aspen’s manufacturing facility in Port Elizabeth).
- One consequence of intense conviction is a certain form of obsession. Both Jobs and Musk are similar here.
- If you work for someone like a Jobs or a Musk, you should not expect a quiet life. But you may find yourself doing the best work you’ve ever done.
- A member of his team at SpaceX, Dolly Singh, described in a Quora posting how Musk responded to the catastrophic failure in August 2008 of a Falcon rocket launch, its 3rd successive failure. Emerging from the control room, he immediately spoke to shell-shocked employees, telling them why they had to pick themselves up and keep trying. Singh commented: “I think most of us would have followed him to the gates of hell. It was the most impressive display of leadership I have ever witnessed”.
- Musk’s clarity of vision comes from the basic laws of physics. “When you want to do something new,” he says, “you have to apply the physics approach. Physics is really figuring out how to discover new things that are counterintuitive”.
- Musk, even more than Jobs, is one of the greatest optimists in history.
- Since his college days, Musk has been certain that humanity must move to sustainable energy, and that it must find a path to expand beyond Earth. These are fundamental to who he is.
- To be sure, there are countless differences between Musk and Jobs. Jobs was never really an engineer. Musk is as good as they get.
- For sheer powers of persuasion, Jobs had no peer. Musk’s style is quiet logic, rather than blow-your-socks-off charisma.
- Yet the qualities they share must be more than coincidence. Anyone looking to make a truly big impact on our future, has much to learn from them:
- Dream big! Don’t focus on making money! Work for an idea that’s bigger than you are! Broaden your mind! Embrace thinking from outside disciplines! Make things as simple as they can be (and no simpler).
- George Bernard Shaw famously said: “The reasonable man adapts himself to the world; the unreasonable one persists in trying to adapt the world to himself. Therefore all progress depends on the unreasonable man”. By that definition, Jobs and Musk are the ultimate in unreasonable men. And the world is so much better for it.